The party gets up the next day. Loudarin has had a dream where Asmodeus lets him know that, as Orcus and himself has a pact, souls gathered add instead of subtract from his remaining soul count. Loudarin decides to leave the party.
Everyone else decides that the watch from the Fallcrest is no longer looking for them, so they decide to make for the main road to Winterhaven instead of staying in the countryside. Not long after they reach the road, a dwarf catches up with them. She introduces himself as Falkrunn, and has been sent by the church and Parle Cranewing. She has a letter informing the party that the Fallcrest watch have determined that the people they killed were not actual guards. The party continues on, and comes to an old abandoned village that still has one building standing. There they meet Graden, who seems to have several imaginary friends. They allow him to come along.
Traveling down the road, Cenedra and several others notice scratches in the ground. As they try to figure out what caused them, kobolds leap out from the bushes and charge the party. Combat rages, and once again Gresh goes down – this time Falkrunn is able to heal him. The party dispatches the rest of the kobolds, and continues on to Winterhaven.
In Winterhaven the party go to the inn, and talk to several of the people there. Valthrun tells them he will research the keep that Parle asked them to investigate. Eilian tells several stories, none of which are of interest to the party. Just after everyone finishes eating, Lord Padraig comes in and buys drinks in honor of the newcomers. Gresh and several others talk to Padraig, finding out that kobolds have been attacking more often lately, and asks the adventurers to clear out their lair. The party agrees, and decides to set out the next morning.
After setting out the next day, the party is ambushed by more kobolds – this time no-one notices them soon enough. This time, several people take damage (although once again Gresh is the only one to get bloodied.) The party continues on to the kobold’s lair, and notices many of them gathered near a waterfall. This time the party is able to surprise the kobolds – using several daily powers to good effect. Almost all the kobolds are dispatched – but one dodges back through the waterfall after several last-ditch attacks miss.